Diamond prices are stable over long periods of time. For instance, if you look at the price over 100 years, you’ll notice it increases by the index value. This means that, on average, diamonds aren’t the best investment, but that they keep their value. We say ‘on average’ because there are exceptions for certain categories and certain periods.
For example, the value of naturally coloured diamonds rose spectacularly at some times. On the other hand, the abundance of some categories of polished diamonds on the market at some times has made prices go down. And in times of crisis, most prices drop throughout the market, but this is compensated by the increases during flourishing economic times. Overall, the prices slowly increase with the index.
All big mining companies continuously weigh the costs of their exploitation and the expected demand from the consumer. If they expect a lower demand, they’ll anticipate by reducing the amount of diamond they dig up, avoiding digging in the most difficult places where costs are higher… And one doesn’t even talk of mining explorations anymore. The middle term effect will be a substantial decrease in the offer, causing a small shortage of raw diamonds and leading to an increase in price.
The value of diamond jewellery is something else. Seeing as various additional factors come into the equation, such as currency exchange rates, labour, gold and design, the value is harder to calculate yet more stable because of the importance of labour and design. Diamond jewellery of a certain brand quality are even more special cases because the brand’s quality guarantee also plays a role… Brands offer a guarantee for a certain quality, which is found in the quality of the materials (diamond, gold, platinum), the research for durability of the design and general aesthetics and the exclusivity (limited editions).
Baunat has chosen to differentiate itself not only through quality and design, but as an innovator in matters of purchase, stock management, distribution and marketing. Baunat only invests in matters contributing to a better process, allowing them to charge a fair price to the end consumer.
3. Also visit www.baunatdiamonds.com/en